New AGOA deal expects more of SA but offers less, says Davies
New conditions attached to the US’s African Growth and Opportunities Act (Agoa) and changes in US trade policy would reduce the value of the measure for SA while raising its costs, Trade and Industry Rob Davies said on Thursday.
This is the first time Mr Davies has expressed disillusionment over the way the renewal of the act, which expires at the end of September, has been used to extract concessions from SA. He said he would raise the matter in the Cabinet shortly.
The US senate recently passed a bill extending Agoa for 10 years with SA included but with stronger conditions. It includes a provision that a review of SA’s trade and investment policies must take place within 30 days of enactment to determine their openness to US products. If found wanting, SA’s benefits could be limited or it could be suspended as a participant.
"Notably absent is any improvement in the level of access of Agoa-eligible countries’ products to the US market," Mr Davies said, ahead of his budget vote speech in Parliament.
It was clear, he said, that the US wanted to transform its trade relationship with Africa from one of nonreciprocal concessions under the current Agoa to one of reciprocal agreements. "It is no longer the same game."
Currently the value of Agoa for SA exceeded its costs because of the benefits for the automotive, agro-processing and chemical industries. But this was likely to change.
SA has had to face a raft of US demands in its negotiations on the Agoa renewal. Objections were raised over its restrictions on US poultry, pork and beef exports, and the Security Industry Association of America objected to the Private Security Industry Regulation Amendment Bill.
The bill, which requires foreign-owned security companies to sell at least 51% of their local businesses to South Africans, is being discussed within government.
There is still no agreement between the South African and US poultry associations over the quantity of US chicken that should be allowed into SA free of antidumping duties. Mr Davies will meet US trade representatives in Paris early next month in a bid to broker a deal on this.
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